Microsoft ended it’s aggressive courtship for Yahoo today. According to the New York Times, a $4 dollar difference in stock price was the sticking point. Yahoo wanted $37 and Microsoft wanted $33. You can read the story here.
Microsoft’s decision to walk away is the latest chapter in a three-month-old standoff that began when Microsoft made an unsolicited offer to acquire Yahoo in an effort to compete more effectively with Google in Web search, advertising and services.
Yahoo rejected Microsoft’s offer repeatedly, saying it undervalued the company. Microsoft at times threatened to lower its offer, originally valued at $44.6 billion, or $31 a share.
In a letter to Mr. Yang that Microsoft released Saturday evening, Mr. Ballmer said that it would not make sense for Microsoft to pursue a lengthy proxy fight. “Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo undesirable as an acquisition for Microsoft,” he wrote.
I can’t say I’m disappointed in the outcome. I was a little pessimistic about old media meeting new media and the potential impact of Microsoft owning properties like Del.icio.us and Flickr. I use both sites pretty frequently and wouldn’t want to see them squandered or misused by Microsoft in any way.
That might sound pessimistic, but I still view Microsoft as mainly an old media company and Yahoo and a new media company. One existed before the birth of the internet, the came after.
Hopefully this is put to rest so I can get back to posting cat photos on Flickr.